Bank of America Projects 65% Upside for Micron (MU) Stock Despite Weekly Volatility

Key Takeaways

Table of Contents

MU shares declined 7% on Friday while SK Hynix ADRs dropped 8.8%, though both finished the week positive
Despite Friday’s decline, Micron finished approximately 6% higher for the week
Bank of America maintains Buy rating with $1,550 target, implying roughly 65% potential upside
Company reported record fiscal Q3 revenue of $41.46 billion, representing 346% annual growth
Upcoming earnings from Microsoft and Amazon may provide additional momentum for memory chip sector

Shares of Micron (MU) experienced a 7% decline on Friday, partially reversing Thursday’s 3.2% advance. Nevertheless, the memory chipmaker still managed to secure approximately 6% gains for the week.

Micron Technology, Inc., MU

SK Hynix’s American depositary receipts experienced an 8.8% decline during Friday’s session, following a 2.6% increase the previous day.

Friday’s retreat followed a challenging month for memory chip manufacturers. MU has fallen 12.8% over the trailing 30-day period, while SK Hynix’s Seoul-traded shares have plummeted nearly one-third during the same timeframe.

Questions surrounding the durability of chip pricing have pressured the semiconductor sector. These apprehensions persist despite this week’s recovery in both stocks.

A positive development emerged from Alphabet’s quarterly report, which revealed ongoing expansion in data center capital expenditures — a favorable indicator for memory producers like Micron. Alphabet stock experienced its largest single-session market capitalization decline on record, yet the optimistic data center outlook provided support to memory chip stocks as the week concluded.

Bank of America Reaffirms Bullish Outlook

Bank of America maintained its Buy recommendation on MU this week, holding firm on its $1,550 price objective, which suggests approximately 65% appreciation from current trading levels.

The firm dismissed concerns that China’s Kimi K3 AI model would curtail artificial intelligence infrastructure investments. BofA contended the reverse scenario — that increasingly efficient AI architectures could accelerate demand for high-bandwidth memory (HBM), DDR5 chips, and NAND flash storage.

The bank further believes that open-weight artificial intelligence could broaden Micron’s total addressable market by attracting thousands of enterprises that will deploy AI systems on proprietary infrastructure, moving beyond dependence on a handful of hyperscale cloud providers.

MU currently commands a valuation of approximately 21.5 times trailing twelve-month earnings and 13.1 times forward earnings — trading below the semiconductor industry average. Additional firms including KeyBanc, TD Cowen, Bernstein, and Citigroup maintain positive ratings on the shares. The Street’s consensus price objective stands near $1,495, indicating roughly 60% appreciation potential.

Exceptional Results Support Optimistic Thesis

Micron’s latest quarterly performance provides substantial ammunition for optimistic investors. Fiscal third-quarter revenue reached an all-time high of $41.46 billion, soaring 346% compared to the prior-year period. Adjusted earnings per share totaled $25.11, climbing from $1.91 in the year-ago quarter.

Free cash flow achieved a record $18.3 billion. Operating cash flow reached $25.39 billion.

Company leadership projected approximately $50 billion in fourth-quarter revenue and non-GAAP earnings per share of roughly $31.

The company has also secured extended-term supply contracts with automotive industry partners including Ford, General Motors, Qualcomm, Denso, Harman, and Visteon.

The coming week features quarterly reports from Microsoft on July 29 and Amazon on July 30. Should either technology giant indicate elevated data center capital spending — similar to Alphabet’s disclosure — memory semiconductor stocks may experience additional upward momentum.

Wall Street analysts assign Micron a “Strong Buy” consensus recommendation.

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